Managing the Risks and Uncertainties of Brexit: A multiple-case study on Swedish SMEs with exposure towards the UK

Abstract

In June 2016, the people of the United Kingdom voted to leave the European Union. The negotiations over Brexit is currently ongoing and can result in different outcomes affecting international trade. This has created uncertainty and risks, not only for companies in the UK, but also for companies worldwide who have a trade relation with the UK. Sweden’s trade relation with the UK is by tradition of great importance, where a large number of companies with exposure to the UK are affected by Brexit. The purpose of this study was to investigate how Swedish SMEs manage the risks and uncertainties of Brexit. In order to do this, a multiple-case study including eight different companies was conducted. The findings from this research emphasize a common denominator, where all SMEs recognize risks and uncertainties from Brexit. The risks from Brexit are mainly treated separately from other risks the companies face rather than in an integrated manner. SMEs combine ideas from the planning and adaptive school of strategic management when facing the uncertainty of Brexit by actively scanning the environment but managing the risks once they actually pose a threat. This while postponing planned investment to limit their risk exposure. The UK is a growing and important market for the companies in the study which makes them unwilling to leave the market. Instead, the risks and uncertainties are managed in order to prepare for business in the Post-Brexit UK.